Goals versus institutions: the development of performance measurement in the Swedish university sector

This paper contrasts goal-directed and institutional approaches to the development of performance measurement (PM) in the Swedish university sector, which has been subject to increasing emphasis on management by objectives since the early 1990s. We adopt a macro perspective, focusing on recent changes in PM related to governmental control of universities and colleges and combine an extensive review of archival data with interviews in our empirical analysis. It is concluded that although the goal-directed model cannot be completely rejected as a heuristic informing recent changes in PM, a process-orientated institutional perspective considerably enriches the analysis by making it less static and more contextually informed. In particular, the latter perspective better explains the evolution of loose couplings between formally stated goals and performance indicators and between different systems for PM by directing attention to the complex interplay between conflicting constituent interests in the evolution of resource and cost allocation practices and quality control procedures. However, our empirical analysis also leads us to reconsider the conceptions of loose coupling as either a “given” feature of institutionalised organizations or an outcome of more pro-active resistance at the micro level prevailing in much earlier work in institutional theory.     

Strategic trading and learning about liquidity

Many practitioners point out that the speculative profits of institutional traders are eroded by the difficulty in gauging the price impact of their trades. In this paper, we develop a model of strategic trading where speculators face such a dilemma because of incomplete information about time-varying market liquidity. Unlike the competitive market makers that they trade against, informed traders do not know the distribution of liquidity (“noise”) trades. Instead, they have to learn about liquidity from past prices and trading volume. This learning implies that strategic trades and market statistics such as informational efficiency are path-dependent on past market outcomes. Our paper also has normative implications for practitioners.     

Option pricing in the presence of natural boundaries and a quadratic diffusion term

This paper uses a probabilistic change-of-numeraire technique to compute closed-form prices of European options to exchange one asset against another when the relative price of the underlying assets follows a diffusion process with natural boundaries and a quadratic diffusion coefficient. The paper shows in particular how to interpret the option price formula in terms of exercise probabilities which are calculated under the martingale measures associated with two specific numeraire portfolios. An application to the pricing of bond options and certain interest rate derivatives illustrates the main results.     

Whither seniority? Career progression and performance orientation in South Korea

Framed by institutional theory, this study reassesses the influence of seniority on (HRM) in South Korea today. We analyze first the overall influence of seniority in business, second its significance for career progression (i.e. promotion), and third its relation to individual performance orientation. By conducting in-depth interviews among local and expatriate managers, we find that the role of seniority is still pronounced. Seniority-based promotion remains significant, and individual performance evaluation systems, as are typically found in Western countries, hardly fit the cultural environment and tend to be ineffective. By contributing to the extant theories on institutional dynamics and the convergence–divergence–hybridization debate alike, our results strengthen the culturalist approaches, holding that informal institutions persist and do not disappear quickly. Further, rather than moving towards global convergence, we see the Korean HRM system as being in a state of hybridization caused by coercive isomorphism resulting from experimentation with foreign best-practice systems. As a result, some HRM practices are dysfunctional. We recommend that firms should reinterpret their valuation of individual performance towards team achievements and pay more attention to the optimal team composition.     

Business model innovation in strategic alliances: a multi‐layer perspective

Business model innovation (BMI) has recently become a topic of interest for research as well as corporate practice. However, we lack specific insights into actors, drivers, and different forms of BMI as the concept is by now mainly addressed in a very general way. In this paper, we analyze how BMI takes place in strategic alliances with the focus of enhancing the recent knowledge about BMI by developing a concept that links firm‐level BMI with alliance‐driven innovation of business models. Against the background of an in‐depth explorative qualitative study, we shed light on the basic nature business model innovation alliances (BMIA) and their effects on both, alliance level and firm level. We develop a process model of BMIA that is the first model providing a holistic picture of this particular type of BMI. Our findings allow for deep insights into BMI processes in incumbent companies and uncover in detail the importance of boundary spanning activities in this realm. By providing these insights, we pave the ground for a new stream of BMI research that focuses on the in‐depth understanding of the role of collaboration and network effects in recent BMI processes. In addition, we show practical benefits for partners in BMI alliances. These insights may help to overcome the traditional fear of negative effects that is still very often prevalent in companies when it comes to issues of partnering with firm external players in strategic issues.     

What about Passive Innovation Resistance? Investigating Adoption‐Related Behavior from a Resistance Perspective

Adoption literature has been dominated by a novelty‐seeking paradigm, whereas resistance to innovation has received considerably less attention as a means to explain and predict adoption‐related behavior. The lack of a good metric to assess consumers' predisposition to resist innovations has prevented the establishment of a common ground for empirical research and thus hampered progress to date. This paper develops and empirically validates a scale to measure individual differences in consumers' predisposition to resist innovations (hereafter, passive innovation resistance, or PIR). The proposed instrument entails a personality‐specific and situation‐specific measure that assesses individual differences in consumers' predisposition to resist innovations, emerging from their inclination to resist changes and exhibit status quo satisfaction. The scale represents a measure of the generic tendency to resist innovations and thus captures the notion of a general disposition to act in a consistent way in various situations. The results of multiple studies show that the PIR scale has good psychometric properties, and its relationships with other constructs conform to theoretical expectations. Furthermore, the PIR scale explains and predicts adoption‐related behaviors beyond the variance accounted for by traditionally investigated constructs such as innate innovativeness, big‐five personality dimensions, or demographic variables. These results clearly reveal the importance of PIR for determining adoption‐related behavior but contest a conceptualization of constructs that tap only novelty seeking at a high level as the direct antecedent of adoption. Research that attempts to explain and predict adoption‐related behavior can benefit from taking a resistance perspective as well.     

How to Overcome Pro‐Change Bias: Incorporating Passive and Active Innovation Resistance in Innovation Decision Models

Adoption literature is largely subject to a pro‐change bias; researchers mainly assume that consumers are open to change and thus interested in evaluating new products. However, consumers often reject innovations without considering their potential, such that the adoption process ends before it really has begun. The present study instead argues that innovation resistance, prior to product evaluation, is a regular consumer response that must be recognized and managed to facilitate new product adoption. The authors suggest differentiating passive from active innovation resistance. While passive innovation resistance results from a consumer's generic predisposition to resist innovations prior to new product evaluation, active innovation resistance is an attitudinal outcome that follows an unfavorable new product evaluation. This study also extends extant innovation decision models by describing how passive and active innovation resistance emerge and how they affect decision‐making in later stages of the process.     

The Tragedy of the Commons and Inflation Bias in the Euro Area

Central bank credit has expanded dramatically in some of the Euro Area member countries since the beginning of the financial crisis. This paper makes two contributions to understand this stylized fact. First, we discuss a simple model of monetary policy that includes (i) a credit channel and (ii) a common pool problem in a monetary union. We illustrate that the interaction of the two elements leads to an inflation bias that is independent of the standard time-inconsistency bias. Secondly, we present an institutional analysis that is consistent with the view of fragmented monetary policy and empirical evidence that illustrates the heterogeneity of central bank credit expansion.